FTC: Bloggers must disclose payments for reviews

By Deborah Yao, Business Writer
The Associated Press

October 5, 2009

The Federal Trade Commission will try to regulate blogging for the first time, requiring writers on the Web to clearly disclose any freebies or payments they get from companies for reviewing their products.

The FTC said Monday its commissioners voted 4-0 to approve the final Web guidelines, which had been expected. Violating the rules, which take effect Dec. 1, could bring fines up to $11,000 per violation. Bloggers or advertisers also could face injunctions and be ordered to reimburse consumers for financial losses stemming from inappropriate product reviews.

The commission stopped short of specifying how bloggers must disclose conflicts of interest. Rich Cleland, assistant director of the FTC's advertising practices division, said the disclosure must be "clear and conspicuous," no matter what form it will take.

Bloggers have long praised or panned products and services online. But what some consumers might not know is that many companies pay reviewers for their write-ups or give them free products such as toys or computers or trips to Disneyland. In contrast, at traditional journalism outlets, products borrowed for reviews generally have to be returned.

Before the FTC gave notice last November it was going to regulate such endorsements, blogs varied in the level of disclosures about these potential conflicts of interest.

The FTC's proposal made many bloggers anxious. They said the scrutiny would make them nervous about posting even innocent comments.

To placate such fears, Cleland said the FTC will more likely go after an advertiser instead of a blogger for violations. The exception would be a blogger who runs a "substantial" operation that violates FTC rules and already received a warning, he said.

Existing FTC rules already banned deceptive and unfair business practices. The final guidelines aim to clarify the law for the vast world of blogging. Not since 1980 had the commission revised its guidelines on endorsements and testimonials.

Cleland said a blogger who receives a freebie without the advertiser knowing would not violate FTC guidelines. For example, someone who gets a free bag of dog food as part of a promotion from a pet shop wouldn't violate FTC guidelines if he writes about the product on his blog.

Blogger Linsey Krolik said she's always disclosed any freebies she's received on products she writes about, but has stepped up her efforts since last fall. She said she adds a notice at the end of a post, "very clear in italics or bold or something — this is the deal. It's not kind of buried."

Copyright © 2009